COMPENDIUM CULTURAL POLICIES AND TRENDS IN EUROPE
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A list of cultural institutions from all artistic fields shall be added in 2016 to The Income Tax Act, making their donations tax-deductible.

 

An amendment to the Austrian VAT Law in 2015 adds a third rate of VAT at 13% that specifically applies to cultural institutions, cinema, theatre and concert tickets.

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Austria/ 5.1 General legislation  

5.1.5 Tax laws

In Austria, only an estimated 1.94% of the overall cultural funding is supplied by the private sector despite the existence of a "Sponsors' Ordinance" regulation adopted by the Federal Ministry of Finance in 1987. Under this regulation, an enterprise / entrepreneur is granted a tax break on expenses for sponsoring cultural events. The ordinance lists various criteria that must be fulfilled in order to qualify for the tax break (sponsoring must, for example, be in the form of an advertisement). This regulation only allows for a very small amount of expenditure to be tax deductible.

The Income Tax Act allows tax deductibility of donations for scientific institutions and federal museums as well as nationwide, private museums. A list of cultural institutions from all artistic fields shall be added in 2016 to make donations to those tax-deductible as well.

On the basis of an amendment to the Federal Arts Promotion Act (1988) in 1997, certain public subsidies are tax free, retrospectively to 1991. These include: grants, prizes and supplements from the Austrian Film Institute for promoting the creation of film concepts and screenplays; income and assistance from public funds or from the funds of public or private foundations, as far as compensation for expenditure or expenses is concerned, or – with the exception of private foundations – for activities abroad.

Income up to EUR 11 000 annually is tax free. Income from EUR 11 000 to EUR 25 000 is taxed at 36.50% and income over EUR 25 000 and up to EUR 60 000 is subject to 43.21% tax. Income above this is as before subject to a top rate of 50% tax. Owing to the progressive income tax tariff, it is most favourable if one earns roughly the same amount each year. For creative workers, however, it is normal for incomes to fluctuate greatly. For this reason, since 2000 they have been able to spread artistic income over three years: one third of the surplus of the current year is assigned to the current year and each of the two previous years.

Since 2000, artists from abroad have been able to apply for the partial or full cancellation of tax liabilities in Austria that are in excess of tax liabilities in their country of origin if their establishment of residence serves to advance art in Austria and if there is public interest in their work.

There are three tax rates under the Austrian VAT Law (1994): the regular rate of 20%, a reduced rate of 10% and a third rate of 13% (established in the course of the tax reform in 2015). The latter specifically applies to cultural institutions, cinema, theatre and concert tickets, but not to charitable public institutions, such as the national theatres and the Salzburg Festival. These institutions are subject to the reduced tax rate, as well as turnover related to artistic activities, museums, botanical gardens or nature parks, as well as services by the Austrian Broadcasting Corporation (ORF), cable TV companies, books, magazines and dailies. There is 20% VAT on music CDs.


Chapter published: 02-02-2016

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